This is the second loan approved from the World Bank in less than a month.
Rabat – The World Bank has announced that it approved a new $300 million loan to support the strengthening of “Morocco’s municipalities” as part of Morocco’s reforms to upgrade public administrations.
The World Bank published a press release on Thursday, November 7, declaring that its executive directors approved the loan.
The statement added that the loan seeks to help Morocco in its “broader efforts to upgrade urban services and turn urban conglomerations into engines of growth and job creation.”
The World Bank will inject the loan through Municipal Performance Project which seeks to promote institutional performance of “participating municipal governments” to address challenges like unemployment.
A recent note from the High Commission for Planning (HCP) said that the unemployment rate in Morocco rose to 9.4 % in the third quarter of 2019 from 9.3% in the same period a year earlier. The continually high unemployment rate is one of the major crises that the government of Morocco has been pledging to address.
The municipal Performance Project aims to “build capacity by providing a sustainable, performance-based framework for municipalities to work with.”
Quoting World Bank’s Maghreb Country Director Jesko Henschel, the statement said that the program’s goal is to “promote territorial development by strengthening Morocco’s municipalities.”
“The program will target key gaps in performance to promote a transparent, efficient, and accountable urban management system that can drive long-term local development and enhance Moroccan cities’ attractiveness.”
The program will work with Morocco’s Ministry of Interior to “roll out an ambitious annual performance assessment of municipalities.”
It spans a five year period from 2019 to 2024, targeting the 100 largest municipalities in Morocco.
Heavy external debts
For senior financial management special and co-task team leader Kolie Ousmane, “strengthening the role of municipalities is a key outcome of the current program.”
Despite the project’s lofty objectives, the approval of the new World Bank loan comes amid mounting external debt.
The World Bank announced a new $500 million loan to promote Morocco’s education sector less than a month ago.
Several top bankers in Morocco warned about the increasing external debt, including Abdellatif Jouahri, the governor of Morocco’s central bank, Bank al-Maghrib.
Last year, Jouahri said he expected external debt to rise to 16.6% of Morocco’s GDP in 2019, up from 13.8% of GDP in 2018.
In his annual report on the economic situation in Morocco, the governor acknowledged in July that Morocco is in a financial crisis as the economy is not able to keep up with growing special demands.
Global Economic Data CEIC found that the external debt in Morocco reached $53.2 billion in June 2019, compared to $51.4 billion in the previous quarter.